布兰查德宏观经济学第七版第7版英文版chapter16.docx

1、布兰查德宏观经济学第七版第7版英文版chapter 16Macroeconomics, 7e (Blanchard)Chapter 16: Expectations, Output, and Policy16.1 Expectations and Decisions: Taking Stock1) Changes in future expected interest rates can affect current consumption. Suppose individuals expect future interest rates to decrease. Consumption wi

2、ll change as a result of this lower expected future interest rate because of its effects on which of the following? A) human wealthB) the value of stocksC) the value of bondsD) all of the aboveE) none of the aboveAnswer: DDiff: 22) Which of the following will not cause aggregate private spending to

3、increase?A) an increase in expected future real interest ratesB) an increase in government spendingC) a reduction in future taxesD) all of the aboveE) none of the aboveAnswer: ADiff: 13) Which of the following will cause aggregate private spending to decrease?A) a reduction in government spendingB)

4、an increase in expected future interest ratesC) an increase in expected future taxesD) all of the aboveE) none of the aboveAnswer: DDiff: 14) The IS curve shifts to the left where there isA) a reduction in current taxes.B) an increase in expected future taxes.C) an increase in expected future output

5、.D) all of the aboveE) none of the aboveAnswer: BDiff: 15) Suppose individuals now believe that there will be a future tax cut. This reduction in expected future taxes will cause which of the following to occur in the current period?A) the LM curve to shift downB) the LM curve to shift upC) the IS c

6、urve to shift rightwardD) the IS curve to shift leftwardE) none of the aboveAnswer: CDiff: 16) Suppose individuals now believe that there will be an increase in the future expected interest rate. This increase in the expected future interest rate will cause which of the following to occur in the cur

7、rent period?A) an upward shift of the LM curveB) a leftward shift of the IS curveC) the IS curve to become flatterD) the LM curve to become steeperE) none of the aboveAnswer: BDiff: 17) Suppose there is a fiscal expansion in the current period. This fiscal expansion will tend to cause a smaller incr

8、ease in current output whenA) an increase in current output causes an increase in expected future output.B) an increase in the current interest rate causes expectations of expansionary monetary policy in the future.C) an increase in the current interest rate causes an increase in expected future int

9、erest rates.D) both A and BE) all of the aboveAnswer: CDiff: 28) Which of the following will not cause aggregate private spending to decrease?A) a reduction in expected future real interest ratesB) a reduction in government spendingC) an increase in future taxesD) all of the aboveE) none of the abov

10、eAnswer: ADiff: 19) Which of the following will cause aggregate private spending to increase?A) an increase in government spendingB) a reduction in expected future interest ratesC) a reduction in expected future taxesD) all of the aboveE) none of the aboveAnswer: DDiff: 110) The IS curve shifts to t

11、he right where there isA) an increase in current taxes.B) a reduction in expected future taxes.C) a reduction in expected future output.D) all of the aboveE) none of the aboveAnswer: BDiff: 111) Suppose individuals now believe that there will be a future tax increase. This increase in expected futur

12、e taxes will cause which of the following to occur in the current period?A) the LM curve to shift downB) the LM curve to shift upC) the IS curve to shift rightwardD) the IS curve to shift leftwardE) none of the aboveAnswer: DDiff: 112) Suppose there is a reduction in expected future output. This wil

13、l cause which of the following to occur?A) the IS curve to shift left in the current periodB) the IS curve to shift right in the current periodC) the LM curve to shift up in the current periodD) the LM curve to shift down in the current periodAnswer: ADiff: 213) Suppose there is a reduction in the e

14、xpected future interest rate. This will cause which of the following to occur?A) the IS curve to shift left in the current periodB) the IS curve to shift right in the current periodC) the LM curve to shift up in the current periodD) the LM curve to shift down in the current periodAnswer: BDiff: 214)

15、 Explain why the new IS curve that takes into account expectations is likely steeper than the original IS curve that ignored expectations.Answer: There are several factors that determine the size of the slope of the IS curve: the multiplier and the interest rate sensitivity of investment. The multip

16、lier is now smaller because changes in current Y do not have as large an effect on current C. So, the mpc is smaller, the multiplier smaller, and the IS curve steeper. Also, a drop in the interest rate that is now temporary will not cause I to increase as much so the IS curve will be steeper. In the

17、 original IS-LM model, changes in Y and the interest rate were implicitly assumed permanent.Diff: 215) Explain the determinants of aggregate private spending.Answer: Aggregate private spending, A, equals C plus I. So, A is a function of current income, future expected income, current taxes, future e

18、xpected taxes, current interest rates, and future expected interest rates.Diff: 216) Explain what effect an increase in future expected output will have on the IS curve and LM curve in the current period.Answer: An increase in Ye will cause human wealth to be higher. Individuals will increase their

19、current consumption and the IS curve will shift right. An increase in Ye will also cause firms to increase their expectations of future expected profits. When this occurs, the discounted present value of future profits is higher causing I to increase. As I increases, the IS curve shifts right. This

20、will have no effect on the LM curve.Diff: 217) Explain what effect a reduction in the future expected interest rate will have on the IS curve and LM curve in the current period.Answer: A reduction in the future expected interest rate will cause an increase in the present value of future disposable i

21、ncome and, therefore, human wealth. This causes current C to increase and the IS curve to shift right. The reduction in the future expected rate will also cause an increase in the present value of future profits. This will cause an increase in investment and another rightward shift in the IS curve.

22、The LM curve will not be affected.Diff: 218) Compare the following three ways to model expectations: animal spirits, adaptive expectations, and rational expectations.Answer: Animal spirits assumed that expectations were simply random. Adaptive expectations assumed that individuals formed expectation

23、s by looking at past changes in a variable. Rational expectations assumed that individuals form expectations by using all currently available information and an understanding of the model and policy.Diff: 219) Explain what effect a reduction in future expected output will have on the IS curve and LM

24、 curve in the current period.Answer: A reduction in Ye will cause human wealth to be higher. Individuals will reduce their current consumption and the IS curve will shift left. A reduction in Ye will also cause firms to decrease their expectations of future expected profits. When this occurs, the di

25、scounted present value of future profits is lower causing I to decrease. As I decreases, the IS curve shifts left. This will have no effect on the LM curve.Diff: 220) Explain what effect an increase in the future expected interest rate will have on the IS curve and LM curve in the current period.Ans

26、wer: An increase in the future expected interest rate will cause a reduction in the present value of future disposable income and, therefore, human wealth. This causes current C to decrease and the IS curve to shift left. The increase in the future expected rate will also cause a reduction in the pr

27、esent value of future profits. This will cause a reduction in investment and another leftward shift in the IS curve. The LM curve will not be affected.Diff: 216.2 Monetary Policy, Expectations, and Output1) Which of the following will cause the LM curve to shift up?A) an increase in the expected fut

28、ure interest rateB) an increase in current incomeC) an increase in expected future taxesD) all of the aboveE) none of the aboveAnswer: EDiff: 12) A change in which of the following will have a direct effect on the amount of money individuals wish to hold in the current period?A) the current nominal

29、interest rateB) the current real interest rateC) the expected future nominal interest rateD) the expected future real interest rateE) all of the aboveAnswer: ADiff: 23) A reduction in which of the following variables will cause an increase in the amount of money individuals wish to hold in the curre

30、nt period? A) current incomeB) the current nominal interest rateC) the current real interest rateD) expected future incomeE) all of the aboveAnswer: BDiff: 24) Suppose individuals expect that interest rates will increase in the future. Also assume that the Fed wants to prevent any change in current

31、output. Given this goal of the Fed, the Fed should implement a policy in the current period thatA) shifts the IS curve rightward.B) shifts the IS curve leftward.C) shifts the IS curve leftward and the LM curve upward.D) shifts the LM curve upward.E) shifts the LM curve downward.Answer: EDiff: 25) A

32、change in which of the following variables will cause a shift of the IS curve in the current period?A) the current interest rateB) current outputC) current taxesD) all of the aboveE) none of the aboveAnswer: DDiff: 16) The IS curve becomes steeper whenA) government spending is relatively small.B) the income tax rate in the current period is relativ